Debt consolidation consists of combining several financial liabilities into one loan with simultaneous unification of the interest rate. Its main task is to reduce the cost of loan servicing, which is repaid in the form of one monthly installment instead of several. In this way, consumers get a chance to reduce the monthly payment, because the installment is lower than the sum of the installments of the consolidated loans. This method secures the borrowers against loss of financial liquidity as a result of failure to repay their liabilities on time.
Find out about debt consolidation
The main advantages of a consolidation loan are:
- installment paid once a month instead of several installments for debt
- a lower installment in relation to the sum of installments paid monthly
- longer loan period, the longer the lower loan installment
A debt consolidation loan at https://consolidationnow.com/ is designed to help consumers in a situation where they have to deal with the problem of having many loans or credits. It also protects against the accidental omission of repayment of one of the installments. Because if the installments are regulated on different dates, there is a risk that we will forget about the next payment or simply will not be able to afford it. It does not reset our credit history and does not make the payment that we owe you pay back will be somehow magically reduced.
To whom a consolidation loan is addressed
We will present a hypothetical situation. We have a loan for a kitchen renovation, a cash loan from a bank for its equipment with household appliances and an installment loan for a car. Total three financial liabilities to be repaid in the form of three separate installments. If, as a result of a flood of work and duties, we accidentally omit the payment of one of the receivables and we do not settle it on time, there will remain a lasting trace in our credit history. We will avoid such a situation by deciding on a consolidation loan. Because by paying only one installment per month and lowering the cost of servicing the loan itself, we do not have to worry that we will miss the repayment date and that we will run out of cash for the next installment.
Before you sign a consolidation loan agreement, remember …
A consolidation loan is nothing more than another financial commitment, so it will not take us out of the spiral of debts we have. If we are unable to grasp the home budget and spend too much on our financial capabilities, debt consolidation will be just another burden. In addition, the interest on the consolidation loan is higher than in the case of standard loans and credits, so do not be hastily opting for the bank with whom you sign the contract. First of all, let’s check carefully what is the actual interest rate on the consolidation loan. Only a full analysis of bank offers and reasonable management of your budget will make us feel a real relief after consolidating our financial obligations.